All Hail To The Chip King

Semiconductor king Intel Corporation (INTC) said late Tuesday that its third- quarter profit fell 8% from last year on lower revenue, but the results and fourth-quarter forecast were higher than analysts expected.

The Santa Clara-based company reported third-quarter net income of $1.9 billion, or 33 cents per share, down from $2.01 billion, or 35 cents per share, in the year-ago period.

On average, Wall Street analysts expected a lower profit of 28 cents per share, on much smaller revenue of $9.06 billion.

Looking ahead, the company forecast fourth-quarter revenues of $10.1 billion, give or take $400 million, and predicted gross margins for the period would be 62%, give or take three percentage points. On average, analysts expect lower revenues of $9.5 billion and a gross margin of 56.86%.

Intel shares rose 88 cents, or +4.3%, in premarket trading Wednesday.

The Bottom Line

We added shares of INTC to our "recommended" list back on Aug.28, when the stock was trading at $19.47. The company has a dividend yield of 2.73%, based on last night's closing stock price of $20.49.

Intel is a "recommended" dividend stock, holding a Dividend.com rating of 3.5 out of five stars.

President and CEO Michael J. Ward said in a statement that "the worst of the recession is likely behind us," since the drop off in third-quarter volume was not as steep as in the second quarter.

CSX Corp shares rose $1.17, or +2.6%, in morning trading Wednesday.

The Bottom Line

Shares of CSX have a dividend yield of 1.99%, based on last night's closing stock price of $44.28. The stock has technical support in the $40 price area. If the shares can firm up, we see overhead resistance around the $48 price levels. We would remain on the sidelines for now.

CSX is not recommended at this time, holding a Dividend.com rating of 3.4 out of 5 stars.